Tuesday, November 20

Government Regulations and the Death of Business

I've recently read
a couple of opinion pieces which dissect the reasons behind Mitt
Romney's loss to Barack Obama in the last election. I've followed these
columnists for years, and have agreed with a lot of things they say, but in this case, they're 180 degrees wrong. Both
of these columnists think that the primary reason Romney lost the
election was because he was a rich, evil banker, that he was part of the
problem our country faces.

The fallacy of false
association is obvious. However, there is a kernel of truth in this
analysis. It isn't the fact that Romney is rich that is a problem. It
isn't even that Romney controlled a large business. No, the problem
stems from the attitude, promoted by the Democrat party and modern
liberalism, that the world would be perfect if we could just remove the
causes of greed. Romney didn't lose because he has a lot of money (so
does Obama). He lost because the Democrats have successfully ridden on
the back of socialist dogma, fooling a lot of people into the perception
that Mitt Romney was at the root cause of our nation's problems.

The
difference between the two concepts is important. One side argues that
Romney didn't win because he caused the economic problems we face in our
country. I argue that Romney didn't win because the Democrats
successfully painted Romney as an evil capitalist.

Of
course Romney didn't cause the mortgage companies and the stock market
to crash. Of course businesses in America aren't the evil institutions
that the Democrats preach they are. Of course rich people aren't the
root of all economic problems. Yes, some businesses do take advantage of
others, but the United States has over 200 years of wealth building and
prosperity precisely because the corporation works.

Let
me paint a different problem and picture. Seven years ago, I started a
corporation that used investment money (mostly my own) to help other
businesses start selling public stock. My partners and I would trade our
expertise, and some capital, for stock in companies that looked like
they would really do well. Many of them prospered and grew into
respectable corporations. When the company started to make a profit, we
could sell off some stock and make a profit ourselves. The companies
benefited by getting capital in order to expand business. We benefited
by taking some investment income from the company. (Yes, by the way, I'm
still a college professor.)

Our business
opportunities ended in 2009. When the Obama administration started, and
when the Nancy Pelosi Congress had a Democrat president to pass all its
bills, the rules for corporations and public stock changed. The federal
government tried to "fix" things. Little guys like me and my partners
were left trying to figure out the new regulations. If we thought we
found a method that would work, the Obama administration changed the
rules. This happened time after time, until I finally gave up on
providing venture capital and taking businesses public.

Here's
the moral of the story. Most businesses in the US are just trying to
make a profit and stay ahead of the game. The US government, however,
under the "wise" leadership of Barack Obama, has adopted a socialist
strategy of interference and regulation to the point that no one can
reasonably determine the rules. Only those businesses which are then
subsidized by the government tend to survive. Small businesses are
getting killed off by the scores.

The federal
government policies of regulation and interference have prolonged the
poor economy and have limited small business opportunities that could
have made a difference.

I'm not concerned about the
dealings of big banks and big businesses. I applaud Mitt Romney for
being able to make good investments during his lifetime. However, when
the federal government actively stifles business, regulates all aspects
of the corporation, enforces draconian rules, layers on impossible
health care regulations, and in effect, does all it can to "help,"
businesses flounder, stagnate, and die.

Yet we have become brainwashed to believe that guys like Mitt Romney are the problem.